Question 1

If the government assigns private property rights to a common resource,then the

Accepted Answer

A)  resource is under-utilized. 
B)  marginal private cost becomes equal to the marginal social cost. 
C)  government needs to set a quota to achieve efficiency. 
D)  resource becomes subject to the free riding problem. 
E)  resource cannot be utilized. 
A)  resource is under-utilized. 
B)  marginal private cost becomes equal to the marginal social cost. 
C)  government needs to set a quota to achieve efficiency. 
D)  resource becomes subject to the free riding problem. 
E)  resource cannot be utilized. B

Question 2

Which of the following is the best example of a private good?

Accepted Answer

A)  a can of Diet Pepsi 
B)  a missile defense system 
C)  a library in St. Louis 
D)  a sidewalk in Fargo 
E)  a cod fish swimming in the middle of the ocean 
A)  a can of Diet Pepsi 
B)  a missile defense system 
C)  a library in St. Louis 
D)  a sidewalk in Fargo 
E)  a cod fish swimming in the middle of the ocean A

Question 3

To achieve the efficient level of national defense,

Accepted Answer

A)  the government could provide national defense because it is a public good. 
B)  private firms can provide national defense because it is a private good. 
C)  the government can provide national defense because it is a private good. 
D)  the government can provide national defense because it is a common resource. 
E)  None of the above answers is correct. 
A)  the government could provide national defense because it is a public good. 
B)  private firms can provide national defense because it is a private good. 
C)  the government can provide national defense because it is a private good. 
D)  the government can provide national defense because it is a common resource. 
E)  None of the above answers is correct. A

Question 4

A seat at an N.B.A.Finals game is a ________ good because it is ________ and excludable.

Accepted Answer

A)  natural monopoly; rival 
B)  public; rival 
C)  private; rival 
D)  natural monopoly; nonrival 
E)  private; nonrival 
A)  natural monopoly; rival 
B)  public; rival 
C)  private; rival 
D)  natural monopoly; nonrival 
E)  private; nonrival

Question 5

"The problem with a common resource is that no one gets to use the resource." Comment on the preceding assertion.

Accepted Answer

The assertion is totally false; the prob

Question 6

Very few voters know the enormous cost of providing price supports to farmers.As a result,these voters most likely exhibit

Accepted Answer

A)  the public provision of a good. 
B)  the principle of minimum differentiation. 
C)  rational ignorance. 
D)  the tragedy of the commons. 
E)  None of the above answers is correct. 
A)  the public provision of a good. 
B)  the principle of minimum differentiation. 
C)  rational ignorance. 
D)  the tragedy of the commons. 
E)  None of the above answers is correct.

Question 7

An office in the Empire State Building is

Accepted Answer

A)  a private good. 
B)  nonexcludable, because it is possible to restrict access to it. 
C)  a common resource. 
D)  a public good because many people can be in the Empire State Building. 
E)  excludable and nonrival. 
A)  a private good. 
B)  nonexcludable, because it is possible to restrict access to it. 
C)  a common resource. 
D)  a public good because many people can be in the Empire State Building. 
E)  excludable and nonrival.

Question 8

One way to overcome the tragedy of the commons is to

Accepted Answer

A)  assign property rights so that someone owns the resource. 
B)  take away property rights so that no one owns the resource. 
C)  leave the market alone because the market will reach an equilibrium in which the efficient amount of the resource is used. 
D)  educate people in order to overcome the problem of rational ignorance. 
E)  None of the above answers is correct. 
A)  assign property rights so that someone owns the resource. 
B)  take away property rights so that no one owns the resource. 
C)  leave the market alone because the market will reach an equilibrium in which the efficient amount of the resource is used. 
D)  educate people in order to overcome the problem of rational ignorance. 
E)  None of the above answers is correct.

Question 9

The concept of rational ignorance is defined as

Accepted Answer

A)  the decision not to acquire knowledge because of high marginal cost. 
B)  the deceit by bureaucrats who fool politicians in order to maximize their budgets. 
C)  politicians not telling the voters the real truth to stay in office. 
D)  voters being kept from knowing the facts by bureaucrats. 
E)  bureaucrats not knowing the size of their budget. 
A)  the decision not to acquire knowledge because of high marginal cost. 
B)  the deceit by bureaucrats who fool politicians in order to maximize their budgets. 
C)  politicians not telling the voters the real truth to stay in office. 
D)  voters being kept from knowing the facts by bureaucrats. 
E)  bureaucrats not knowing the size of their budget.

Question 10

As more of a public good is produced,the marginal benefit of each additional unit ________ and as more of a private good is produced,the marginal benefit of each additional unit ________.

Accepted Answer

A)  increases; increases 
B)  increases; decreases 
C)  decreases; increases 
D)  decreases; decreases 
E)  does not change; does not change 
A)  increases; increases 
B)  increases; decreases 
C)  decreases; increases 
D)  decreases; decreases 
E)  does not change; does not change

Question 11

$$\begin{array} { | c | c | } 
\hline \begin{array} { c } 
\text { Tons of } \
\text { fish }
\end{array} & \begin{array} { c } 
\text { Marginal social } \
\text { benefit } \
\text { (dollars per hour) }
\end{array} \
\hline 100 & 700 \
\hline 200 & 600 \
\hline 300 & 500 \
\hline 400 & 400 \
\hline 500 & 300 \
\hline 600 & 200 \
\hline
\end{array}$$
-The table above shows the marginal social benefit of fishing in Mediterranean Sea.The marginal private cost of operating a fishing boat is the same for all producers,$300 per hour.The marginal social cost is twice the marginal private cost.The efficient quantity of fish caught is ________ tons.

Accepted Answer

A)  100 
B)  200 
C)  300 
D)  400 
E)  500 
A)  100 
B)  200 
C)  300 
D)  400 
E)  500

Question 12

Which of the following describes the principle of minimum differentiation?

Accepted Answer

A)  competitors becoming identical to appeal to the largest number of clients or voters 
B)  minimizing the difference between marginal benefit and marginal cost 
C)  voters becoming highly informed to elect the best candidate 
D)  bureaucrats providing the most efficient level of pubic goods provision 
E)  minimizing the amount of free riding that occurs 
A)  competitors becoming identical to appeal to the largest number of clients or voters 
B)  minimizing the difference between marginal benefit and marginal cost 
C)  voters becoming highly informed to elect the best candidate 
D)  bureaucrats providing the most efficient level of pubic goods provision 
E)  minimizing the amount of free riding that occurs

Question 13

-The above figure shows the marginal private cost curve,marginal social cost curve,and marginal social benefit curve for cod,a common resource.The market equilibrium with no government intervention is ________.

Accepted Answer

A)  0 tons per week 
B)  200 tons per week 
C)  400 tons per week 
D)  500 tons per week 
E)  None of the above answers is correct. 
A)  0 tons per week 
B)  200 tons per week 
C)  400 tons per week 
D)  500 tons per week 
E)  None of the above answers is correct.

Question 14

For a common resource such as fish,the marginal private benefit ________ the marginal social benefit and the marginal private cost ________ the marginal social cost.

Accepted Answer

A)  equals; is less than 
B)  is greater than; equals 
C)  equals; equals 
D)  is less than; is less than 
E)  is greater than; is greater than 
A)  equals; is less than 
B)  is greater than; equals 
C)  equals; equals 
D)  is less than; is less than 
E)  is greater than; is greater than

Question 15

A private good is

Accepted Answer

A)  nonexcludable and nonrival. 
B)  excludable and rival. 
C)  excludable and nonrival. 
D)  nonrival and excludable. 
E)  subject to the free-riding problem. 
A)  nonexcludable and nonrival. 
B)  excludable and rival. 
C)  excludable and nonrival. 
D)  nonrival and excludable. 
E)  subject to the free-riding problem.

Question 16

How does the marginal social cost curve of a common resource compare to the marginal private cost curve of the common resource? If there is a difference,why is there a difference? If there is not a difference,why is there not a difference?

Accepted Answer

The marginal social cost curve of a comm

Question 17

What is an individual transferable quota (ITQ)?

Accepted Answer

An ITQ is a production limit that is ass

Question 18

The efficient quantity of a public good is

Accepted Answer

A)  the quantity produced by private firms. 
B)  the quantity at which the marginal benefit equals the marginal cost. 
C)  impossible to determine because each person's marginal benefit is different. 
D)  the quantity at which the marginal benefit exceeds the marginal cost by as much as possible. 
E)  the quantity determined by the intersection of the demand curve and the supply curve. 
A)  the quantity produced by private firms. 
B)  the quantity at which the marginal benefit equals the marginal cost. 
C)  impossible to determine because each person's marginal benefit is different. 
D)  the quantity at which the marginal benefit exceeds the marginal cost by as much as possible. 
E)  the quantity determined by the intersection of the demand curve and the supply curve.

Question 19

Which of the following goods is excludable and nonrival?

Accepted Answer

A)  food 
B)  air 
C)  the Internet 
D)  a streetlight 
E)  a two liter bottle of Mountain Dew 
A)  food 
B)  air 
C)  the Internet 
D)  a streetlight 
E)  a two liter bottle of Mountain Dew

Question 20

The free-rider problem
i.means that people can consume a good without paying for it.
ii.means that people pay too much for a good in order to consume it.
iii.applies to a public good.

Accepted Answer

A)  i only 
B)  iii only 
C)  i and ii 
D)  ii and iii 
E)  i and iii 
A)  i only 
B)  iii only 
C)  i and ii 
D)  ii and iii 
E)  i and iii

If the government assigns private property rights to a common resource,then the

Which of the following is the best example of a private good?

To achieve the efficient level of national defense,

A seat at an N.B.A.Finals game is a good because it is and excludable.

"The problem with a common resource is that no one gets to use the resource." Comment on the preceding assertion.

Very few voters know the enormous cost of providing price supports to farmers.As a result,these voters most likely exhibit

An office in the Empire State Building is

One way to overcome the tragedy of the commons is to

The concept of rational ignorance is defined as

As more of a public good is produced,the marginal benefit of each additional unit and as more of a private good is produced,the marginal benefit of each additional unit .

Which of the following describes the principle of minimum differentiation?

-The above figure shows the marginal private cost curve,marginal social cost curve,and marginal social benefit curve for cod,a common resource.The market equilibrium with no government intervention is ________.

For a common resource such as fish,the marginal private benefit the marginal social benefit and the marginal private cost the marginal social cost.

A private good is

How does the marginal social cost curve of a common resource compare to the marginal private cost curve of the common resource? If there is a difference,why is there a difference? If there is not a difference,why is there not a difference?

What is an individual transferable quota (ITQ)?

The efficient quantity of a public good is

Which of the following goods is excludable and nonrival?

The free-rider problem i.means that people can consume a good without paying for it. ii.means that people pay too much for a good in order to consume it. iii.applies to a public good.

Getting Started

The U.S.and Global Economies

The Economic Problem

Demand and Supply

Elasticities of Demand and Supply

Efficiency and Fairness of Markets

Government Actions in Markets

Taxes

Global Markets in Action

Externalities

Markets with Private Information

Consumer Choice and Demand

Production and Cost

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Markets for Factors of Production

Economic Inequality

Filters

Exam 11: Public Goods and Common Resources

If the government assigns private property rights to a common resource,then the

Which of the following is the best example of a private good?

To achieve the efficient level of national defense,

A seat at an N.B.A.Finals game is a ________ good because it is ________ and excludable.

"The problem with a common resource is that no one gets to use the resource." Comment on the preceding assertion.

Very few voters know the enormous cost of providing price supports to farmers.As a result,these voters most likely exhibit

An office in the Empire State Building is

One way to overcome the tragedy of the commons is to

The concept of rational ignorance is defined as

As more of a public good is produced,the marginal benefit of each additional unit ________ and as more of a private good is produced,the marginal benefit of each additional unit ________.

Which of the following describes the principle of minimum differentiation?

-The above figure shows the marginal private cost curve,marginal social cost curve,and marginal social benefit curve for cod,a common resource.The market equilibrium with no government intervention is ________.

For a common resource such as fish,the marginal private benefit ________ the marginal social benefit and the marginal private cost ________ the marginal social cost.

A private good is

How does the marginal social cost curve of a common resource compare to the marginal private cost curve of the common resource? If there is a difference,why is there a difference? If there is not a difference,why is there not a difference?

What is an individual transferable quota (ITQ)?

The efficient quantity of a public good is

Which of the following goods is excludable and nonrival?

The free-rider problem i.means that people can consume a good without paying for it. ii.means that people pay too much for a good in order to consume it. iii.applies to a public good.

Getting Started

The U.S.and Global Economies

The Economic Problem

Demand and Supply

Elasticities of Demand and Supply

Efficiency and Fairness of Markets

Government Actions in Markets

Taxes

Global Markets in Action

Externalities

Markets with Private Information

Consumer Choice and Demand

Production and Cost

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Markets for Factors of Production

Economic Inequality

Filters

A seat at an N.B.A.Finals game is a good because it is and excludable.

As more of a public good is produced,the marginal benefit of each additional unit and as more of a private good is produced,the marginal benefit of each additional unit .

For a common resource such as fish,the marginal private benefit the marginal social benefit and the marginal private cost the marginal social cost.